Yep - big flag! Everyone has been told how we are losing money on everything and told over and over we need to charge more and spend less... so this was a shock. I am already planning to run for president this spring. And the audit required by our bylaws so will be tackled right away. Thanks for the feedback everyone!

Wow. That's pretty much my school's whole fundraising income for two years, and I'm at a school with about 900 kids.

So, the difference in interest rates for a one year CD v. a 5 year CD would come to about an extra $250-$300/year. I still don't think it is worth that extra money to lock it up for 5 years, and I just don't see the point of locking that money up for 5 years to begin with. How does that do anyone any good?

Based on what you've described, and having been in a similar situation with a different kind of organization, the Treasurer probably won't be happy with any proposals to spend the money. However, I think now that the principal and parents know how much is out there, a lot more people would be happier if some of it did get spent now. Maybe the principal could come up with a list of some technology needs that could be met with some of the money as a one time purchase? Or with teacher appreciation coming up, maybe you could install a picnic area outside for the teachers to eat lunch? Perhaps with some large one time thing like that, the Treasurer could get on board and be happy with the idea because it would be like leaving some sort of legacy.

Then, next year, with a new Board going forward, you could change the focus and spend the money down by maybe only having one big fundraiser at the beginning of the year, then no more fundraisers. Or making your other events that you normally charge for be free of charge. Or adding in more free family nights, or serve food at a family event where you haven't in the past.

This also raises a big red flag about audits and financial controls--the President should be requiring monthly financial reports and looking at the bank statements every month. And there should be a year end audit report done and presented to the general membership. If your bylaws don't provide for those things, I would put some energy into getting the bylaws changed.

It is more in the $20-30k range, and looking at a 5-year CD. We are a K-5 school so basically saying those kids here now that have contributed to it, won't ever see it used on them. Things like field trips, money for teachers to use for classroom supplies, and even student recognition programs were cut budget the past few years and my opinion is this is those kids money that are here now.

The money is not being set aside for anything specifically. The treasurer, in her own words, "I have saved up this money" which is scary as her job is not to put aside and horde money but to keep an accurate record. She has on more than one occasion made it clear she thinks her job is to make sure the PTO makes money on everything (which has been on ongoing issue as the previous boards were more about family involvement).

I am not sure the principle has been aware of how much the PTO had based on the reaction about the amount presented (and was very against locking the funds in a CD especially since they are not planning on being on the board next year). There are rarely financial statements at the meeting, it's always "this is where we are on fundraising, numbers are down, under budget, need to charge more, need to cut, etc". No real numbers/statements, and she's been Treasurer for 3 years and everyone was shocked to learn how much was put away. There is a new principle and new board at the end of this school year, feeling by many is nothing should be done at this time, others agree the interest would be good (by why wasn't it done the last 3 years is my question, why lock it up right before elections?)

I'll review the by-laws, but I believe you are right that the board does have authority to open new accounts. That sounds right. I'm just fearful for where this is going.

No, putting money into CDs would not be an expenditure; it's like opening up another bank account. You might check and see what your bylaws say about that, but they most likely give the Board the authority to open up new bank accounts.

I can't think of a situation where a new Board just flat out wouldn't be able to get out of those CDs in the future, BUT it would probably involve an early withdrawal penalty of some sort. Just for discussion purposes, let's say you're looking at a $10k CD for 3 years. The difference on interest rates on a CD that size for 1 year v. 3 years is generally in the neighborhood of .6%. That's basically $60/year. Is the extra interest that will be earned on the longer term investment worth it?

You don't say what the money is being set aside for, but it sounds like a lot of money. I would probably try to make the argument that the small amount of extra interest revenue that comes from the longer CD period isn't worth it, given that Board members change so frequently, along with the school population and needs.

Can they? Perhaps. Should they, without approval from the general membership? No. Is there a good reason to invest money that was raised from parents of current students, rather than using that money to help those very students? Rarely.

Our PTO does have some money set aside for maintenance of the playground; it's meant to take care of minor repairs over the years between major renovations. I have wondered if I should have invested some of that in something better than the checking account with minimal interest. I'm not aware, however, of any by-laws or state law that would prohibit me from doing so.

501(c)(3)'s can't have too much of their income in a year come from investment; you're probably not going to get close to that percentage, but bringing up the point might give the board some pause.

Can an existing board put funds (5 digits) in long term CDs that future boards can't touch for years?

Our bylaws state that the executive board can not have over $1000 in expenditures beyond what was approved by the general membership, but is putting money in a CD an expenditure?

Also, the president and treasurer are not running for office again on top of this, so they won't be there anyway - do they have this right (not asking if they should do this, but can they without membership approval?)